ObjectivesDell has entered Vietnam market in the form ofexportingDell achieved good development in the marketDell has some assembly plants around theglobe, but not in Vietnam yetThe objectives of the study is to help Dell todecide to invest into an assembly plant in Viet-nam in the form of a FDI
Company BackgroundThird-largest manufacturer of personal com-puters in the worldDell sells computers and provides additionalprofessional servicesFollows strategy of low costs: direct salesmodelThe globalization brings both opportunities andthreats to Dell
Cultural ImpactDensely populated – 90 billions, with the percentage of young people take 60% in the populationHas the speed of internet development ranked number one in the regionGDP per capita increase yearly promises an increase in the purchasing powerUS brand products are highly evaluated by local customersEnglish becomes one of major languages in Vietnam
Opportunities Intel has built its largest plant in Vietnam, promising to supply computer processors at high quality, lower price and more customers tailored. More and more IT companies, both upstream and down- stream, come to Vietnam, promising Vietnam will be one of the largest exporters of PC Low labor cost in compared with China or other neighbor na- tions.
OpportunitiesImport tariffs for electronics: spare parts 5%, finished product: 20%Export Processing Zones and Hi-Tech Indus- trial Parks provides favorable conditions to investors: tax, rent, utilities...Vietnam is an official member of ASEAN, a free trade zone, building factory in Vietnam to produce products and then sell to other ASEAN member countries at 0% import tar- iffs.
ThreatsGeographic: the nation islong from the North to theSouth but narrow from theEast to the West. It makes itinefficient in distribution sys-tem from the North to theSouth for any investors.Threat of war with China inthe North makes the in-vestors feel less confident ininvesting into Vietnam
ThreatsLack of viable legal structure for international businessFew lawyersFew protections for copyright and intellectual propertiesPoor infrastructures systemPower outages are very often
ConclusionVietnam is a good potential market for DellThe demand is huge and not yet satisfied, es- pecially from students and small and medi- um enterprisesDell import its product produced by Foxconn, China to sell in Vietnam marketDell highly evaluate Vietnam market and give a strong commitment to invest more into the market
Recommended Entry MethodsDell should build up its own assembly plant in VietnamDevelop distribution system by Dell itself or in cooperation with local partners, bringing products to the hands of customersSet up production factory in Hi-Tech parks to enjoy favorable conditions from the gov- ernment in tax, rent, utilities ...